“We’re getting a divorce. What do we need to do?” This is a question I get a lot. And it’s so common because divorce is an overwhelming process with many aspects. So where do you start? Every situation has its particulars so the ‘right’ answer will be different for different people but one area of focus is the same for everyone: finances.

If, for example, you and your spouse make the same amount of income, kept separate bank accounts for the one year you were married, accumulated zero debt and assets, then the resolution here is probably very easy. But that’s pretty rare. Most couples have accumulated some debt during the marriage, like a car loan, and accumulated some assets, such as home equity or retirement. These things need to be first accounted for and second, divided up in some way.

The best way to make a wise financial decision is to start with the facts. What do you have and what do you owe? So, Step One is to create two lists: Assets and Debts. Write them all down, the names of the accounts, the balances on each and in whose name they are in (yours or your spouses or joint). While you’re at it, include the monthly payment amount for any debts.

Step Two is to think about (not say – yet, anyway) who will get what. Do you split everything down the middle, 50/50 style? Or are there other factors that may not make this the most logical approach? The reason I say ‘think and not say (yet)’ is because money can make us all a little or a lot nervous and when we act out of a nervous place we may say something we regret later. This is a time to be careful and deliberate, not hurried and offhand.

Step Three involves your individual – not household or married – gross monthly income. That’s the amount you get paid before anything like taxes or insurance premiums are taken out. If you’re salaried this is a fairly easy thing to calculate. If your income fluctuates due to things like commission, overtime or self-employment then you’ll need to do some math. In this case, you’ll want to know your average monthly gross amount.

Step Four is to consider what your finances will be like when you live separately, if you’re not already. If you plan on buying a home, what might the monthly mortgage be? If you don’t have a broker, there are online calculators to help you figure this out. If you’re thinking about renting, what are market-rate rents in the area you want to live? What will the utilities be? Groceries, car notes, student loans, etc. Will you have to get your own health insurance and if so how much is that? You might need to do some research here and then put it all down on paper and do some math. It’s a word some people despise but a budget will be your best friend during this transition. Two households are more expensive than one and you’ll want to know how much more so you can make wise choices that you can afford.

This exercise should take a bit of time and will probably bring up some questions. Write those down so you can keep track and get them answered. Once you have all of this in place you’ll be better prepared to consider and discuss the fairest way to share both debts and assets as well make plans for your next phase of life. Also, know that the court will require something called a ‘Domestic Relations Financial Affidavit’ and this is kind of information that goes on this form. If you follow the above steps you’ll be able to fill this form out with ease. Good luck!

Seeing this so often has led me to put together a checklist of things to plan on so you go into mediation (or any important meeting) with a clear, focused mind, rather than a scattered, unprepared one.

As you’re in the process of making the major decision of divorce, you may be imagining a picturesque life on the other side of it and want to try and get there as fast as possible. It would be most wise, however, to take the time to do your homework so you can make informed decisions that may very well may impact the rest of your life.

This blog entry is for folks who are familiar or are trying to learn how to calculate child support. The changes provide for more flexibility for parents and a couple of 'outs' to having to come back to court for expected changes as the children grow.